Major employers vow to keep their offices open
City employers have challenged Boris Johnson’s work from home orders by vowing to keep offices open due to mental health concerns and the need to conduct business critical meetings in person. JP Morgan and Deutsche Bank are among businesses that do not intend to close their offices with the former telling UK-based employees that its buildings “will continue to be accessible to all employees who need to come in”. Deutsche Bank will also keep traders working at its London headquarters. Goldman Sachs and Morgan Stanley are understood to have not yet finalised plans around how the new guidelines will change their working arrangements. The City of London Corporation said the restrictions were a disappointment to business in the Square Mile with the organisation’s policy chair Catherine McGuinness urging the Government “to set out a clear roadmap to normality early in the new year and base all decisions on data.”
Watchdog calls for pause in bank closures
Consumer group Which? has called for a halt to branch closures warning that banks may be rushing to axe outlets before new measures to ensure people who still want cash can get it are announced. Some 736 such outlets have already shut in 2021, with another 220 already set to close next year. Anabel Hoult, Which? chief executive, said: "The alarming acceleration of bank branch closures has left many people who depend on them for essential banking services at risk of being cut adrift.” UK Finance's Access to Cash Action Group is set to outline measures to address the country's cash crisis. David Postings, chief executive of UK Finance, commented: "Ensuring there is continued access for those who need it, both now and in the future, is something the banking and finance industry has already publicly committed to delivering."
‘Monzo for millionaires’ offers new savings account
Monument Bank has gone live with its first savings accounts offering a savings rate of more than 2% to customers willing to lock away a balance of £25,000 for five years. The accounts are accessible only via a mobile phone app. The maximum deposit allowed by Monument is £400,000. Additionally, the bank plans to specialise in loans to professional and semi-professional residential landlords.
TSB shakes up parental leave
TSB is introducing equal parental leave, miscarriage leave and support for infertility and menopause as part of a new package for staff. All new parents, including after adoption, will be able to take up to a year's leave with their child. The bank said that this measure "levels the playing field at work and removes any barriers to career progression".
SoftBank sells $550m of WeWork debt
SoftBank has sold $550m worth of WeWork debt offering the bonds at roughly 86 cents on the dollar to lure investors.
UniCredit to pay out €16bn to investors under new plan
UniCredit unveiled a new three-year strategy on Thursday pledging to grow its net profit by 10% a year through 2024 to above €4.5bn by betting on fee income to drive revenues. CEO Andrea Orcel also surprised the market by promising to return at least €16bn to investors, driving shares in the bank up 10.6% by late morning. UniCredit is also open to considering M&A opportunities if conditions are right, said Orcel, with the bank also planning to cut €1.5bn in costs including by reducing headcount in certain departments and by bringing some work back in-house.
SEC chair orders staff to recommend new investor protections for Spacs
Gary Gensler, the chairman of the U.S. Securities and Exchange Commission, said on Thursday the regulator is considering toughening rules around how underwriters, boards of directors and sponsors of Special Purpose Acquisition Companies (Spacs) structure fees, issue projections and disclose conflicts. His remarks come amid a rush of investigations into companies that have chosen to list on stock markets via Spacs, listed shell companies that take private groups public through a merger. Mr. Gensler said he wants to level the playing field between traditional initial public offerings and Spacs, which now account for more than three-fifths of all U.S. IPOs.
Bank of America targets new banking customers
Bank of America has launched a new rewards program designed to encourage up to a million wealthy clients to open credit cards and checking accounts. CEO Brian Moynihan called the preferred rewards program a key pillar of the bank's growth strategy.
Volkswagen boosts investment in electric vehicles
Volkswagen plans to increase its spending for battery-powered electric vehicles by about 50% to €52bn over the next five years, meaning total investments for the 2022-26 period will come in at €159bn, compared with €150bn for 2021-25.
Rolls Royce says restructuring is ahead of target
Rolls-Royce has finally stemmed its capital bleed which was running at more than £1bn a quarter at one stage. The company said cash outflows for 2021 would come in lower than the £2bn previously forecast and that as part of its restructuring it would remove more than 8,500 jobs by the end of this year. “While external uncertainties clearly remain, we have seen continued gradual recovery in our civil aerospace business, a growing order book in power systems and have secured a significant contract win in defence,” said Rolls-Royce chief executive officer Warren East.
Reeves remains in favour of equivalence for financial services
Rachel Reeves has said that Britain’s post-Brexit policy for the financial services industry should still be to seek equivalence with EU regulations. In an interview with City AM, the shadow chancellor said: “The size of the systemic risks posed by having such a large financial services sector means you’ve got to be able to control regulation, you can’t outsource that regulation.” She adds: “That doesn’t prohibit getting equivalence. That was the government’s objective in the first place, but during the course of the government’s Brexit negotiations financial services were sold down the river. That was a mistake. For jobs, for tax revenues, our financial services sector in London, Leeds and around the country are incredibly important. The biggest net export sector in our economy.”
FCA struggling to recruit data and tech specialists
Financial Conduct Authority (FCA) chief executive Nikhil Rathi told MPs on the Treasury Select Committee that the hot jobs market was making it difficult to hire staff for data and technology roles in particular. “We're no different to any other significant employer in having to manage those challenges,” he said, adding that the regulator’s plans to open a Leeds office, which were first revealed in its 2021-22 business plan published in the summer, would help ease the tech recruitment troubles, as it could tap into the “really outstanding talent pools” from the city's universities.
WhatsApp now supports cryptocurrency payments in the US
Facebook, now known as Meta, has surprised market watchers with the news that it is opening up WhatsApp to Meta’s cryptocurrency wallet, Novi in a pilot, so US users can make crypto payments via the messaging app. Novi head Stephane Kasriel said in a tweet: “We often hear that people use WhatsApp to coordinate sending money to loved ones, and Novi enables people to do that securely, instantly and with no fees. Payments will appear directly in people’s chat.”
FCA refuses to block swoop on LV=
The Financial Conduct Authority (FCA) has refused to withdraw its letter declaring no objection to the takeover of LV= by private equity firm Bain Capital following a plead from Leigh Day, the law firm hired by policyholders seeking to delay a vote on the deal. The FCA's refusal to intervene paves the way for LV= to announce whether its 1.2m members backed the controversial £530m takeover.
Finance industry sceptical over FCA plan to shake up rules
Consumer groups and financial services companies have warned that a planned overhaul of consumer protection by the FCA is “theoretical and woolly” and may go beyond what it can deliver.
LEISURE & HOSPITALITY
Saga to introduce paid leave for new grandparents
Saga, the travel and insurance company for the over-50s, is to give employees a week of paid leave to celebrate the birth of a grandchild. “This is about helping new grandparents celebrate a special moment and play a role in growing families from day one,” said Jane Storm, the chief people officer at Saga. “It is also a symbol of how important older workers are to their companies and society.”
Agents report panic buying in property hotspots
A survey by the Royal Institution of Chartered Surveyors has revealed a fall in the number of new homes for sale for the eighth month in a row, with the shortage of stock forcing desperate buyers to buy without viewing in person. Tracey Bullen, a chartered surveyor in Cornwall, which overtook London as the most searched-for location by buyers earlier this year, said: "Potential purchasers are viewing homes from videos and putting in offers above the asking price to secure a move to the county.” Property prices hit a 15-year high of £272,992 in November, according to Halifax, an 8.2% increase compared with the same month last year. The huge growth has been fuelled by fierce competition between buyers, which the Rics predicted would continue to increase house prices well into next year.
Evergrande defaults on debt
Chinese property giant Evergrande defaulted on $1.2bn in bond debt on Thursday. The company owes a total of $300bn and now Beijing is reportedly preparing a “controlled demolition” of the firm to protect its economy. Fitch Ratings downgraded the firm's status to a restricted default rating and noted that Kaisa, a smaller property company but one of China's most indebted, had defaulted on $400m of bonds.
Italy fines Amazon €1.1bn for abusing market dominance
Amazon has been fined €1.13bn by Italy’s competitions watchdog for harming rival e-commerce logistics services. The regulator said Amazon harmed its rivals by only giving companies which used its in-house delivery service access to the ‘prime’ label, implying other logistics companies were of an inferior standard. A spokesperson for Amazon said the company will appeal adding that “the proposed fine and remedies are unjustified and disproportionate.”
French football league sells stake in media rights business
Private equity groups including CVC Capital Partners and Bain Capital are preparing bids for a stake of up to 20% in a new media rights company being set up by the Ligue de Football Professionnel. The French plan is the latest by a European league to shore up finances after clubs across the continent were hit by the pandemic.
Ministers rule out further business support under new Covid restrictions
Ministers have rejected pleas for financial support for companies, including hospitality and retail businesses that face losing crucial sales over the Christmas period due to the imposition of Covid restrictions. The response comes after pub and hospitality bosses have urged the Government to reintroduce tax cuts, furlough and business grants amid fears that Plan B restrictions will deliver a "devastating" blow to the industry. Meanwhile, Paul Dales, at Capital Economics, says the measures could knock up to 0.5 percentage points from GDP in the month of December. He warns this could still be enough to cause the economy to contract that month - based on a pre-Omicron prediction that GDP would rise by
0.2% - with growth potentially swamped by the negative effects of the
new wave of restrictions.